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Gold Prices Surge Through $1,400, Fed on Deck

Release Date: 
Tuesday, December 14, 2010

GOLD PRICE NEWS – The gold price rose overnight, climbing as high as $1,408 per ounce before settling back near $1,400 early Tuesday morning. Silver followed the price of gold higher, gaining $0.24 to $29.77 per ounce. While the gold price has risen 28.2% this year, its sister precious metal, silver, has appreciated a huge 76.5% in 2010. Despite these strong gains, the rally in precious metals has paused over the past two weeks as worries over tighter monetary policy in emerging markets, notably in China, have escalated.

While Chinese policy makers may be on the verge of moving to tighter money in order to contain inflation pressures, it is clear that Chinese demand has helped drive the gold price to record all-time highs. In addition to increasing it central bank gold reserves, the nation has taken other steps to liberalize it gold market. The exchange’s plans are the latest in a series of steps that China has taken in recent years to make it easier for its citizens to invest in gold. The Hong Kong Mercantile Exchange, a separate company, plans to establish gold futures trading, while the Hong Kong government built a high-security gold vault in 2009 to allow foreign investors to store their gold in the city.

Investors in markets across the globe have increasingly added gold and investments tied to the gold price to their portfolios. The trend of declining confidence in fiat currencies has fueled the rise in gold, silver, and other hard assets. Not only have individual investors taken steps to increase their exposure to the gold price, but gold producers have done the same.

At 2:15pm eastern time today, Fed Chairman Ben Bernanke and his colleagues on the Federal Open Market Committee will release their interest rate decision. While it is widely anticipated that interest rates will be held near zero, investors and traders will scour the accompanying policy statement in search of further insight into the Fed’s ongoing quantitative easing initiative and its outlook for employment and inflation.

Article provided by GoldAlert.com.


This article is independently provided by GoldAlert.com and does not represent the views or opinions of Goldline International, Inc. Although the information in this article has been obtained from sources believed to be reliable, Goldline does not guar­antee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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